Latvia’s Education Ministry Overpays Millions for Computers, Excluding Cheapest Bidder

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The situation began in late 2024, when the IZM initiated a project, “Enhancement of Quality Implementation of General Education Content in Primary and Secondary Education,” supported by European Union funds, with a budget of 20.08 million euros for computer purchases.

During the bidding process, the IZM indicated in its Electronic Procurement System (EIS) that it would adjust the number of units to maximize purchases. However, the ministry ultimately deviated from this approach, disqualifying a contender that submitted the lowest bid in October 2024 and instead procuring computers from a more expensive vendor. This decision raises questions about procurement transparency and cost-effectiveness.

The IZM sought computers with various configurations, including those running Google Chrome and Windows operating systems, with and without touchscreen displays, and with both wired and wireless mice, as well as differing screen sizes and processor capabilities. The ministry specified these requirements as minimum standards, with vendors often offering products exceeding those specifications. For example, a Chromebook offered by Capital with a minimum 13-inch screen was available with a 14-inch screen at the same price, a pattern repeated across other specifications.

On October 21, 2024, at approximately 10:00 PM, the IZM created a basket in the EIS system, including 19,000 Chromebook computers at 260 euros each to be supplied by Capital, along with 1,497 similar Chromebook computers to be supplied by Baltijas Informācijas Tehnoloģijas at a price 70 euros higher, as well as several items from ATEA, and 3,495 computers with Windows operating systems at 399 euros each. The total value of the “basket” was 12.3 million euros for 40.7 thousand computers, or 298 euros per unit excluding VAT. This appeared to be a competitive price… initially.

However, by the conclude of the week, complications arose. On October 25, 2024, the day the procurement was to be approved, Evija Stočka, Project Manager in the IZM’s Information Technology Department, emailed Capital requesting urgent submission of a complete technical specification for position IZM 22.2.1.3.1, which the company promptly provided. Stočka apparently noticed that Capital had not updated the product description for the computers in the EIS system. While the description indicated non-compliance with specifications, Capital affirmed that the computers did meet the requirements, resubmitting the information on the same day and again on October 29, to both Stočka and Kaspars Veldre – a former IZM employee who was then a member of the procurement commission and Deputy Director of the Information Technology Department.

When the procurement results were published, the IZM refused to purchase not only the 3,495 computers with the incomplete product description but also the 19,000 lowest-priced computers. Veldre had informed Capital the previous day, at 11:13 PM, that the IZM now required computers with larger memory capacity and more powerful processors, effectively changing the initially defined technical specifications and quantity. Despite these changes, Capital responded early the next morning, stating its ability to provide computers meeting the revised specifications. However, this was to no avail.

The IZM maintained its position that the computers did not meet the specifications, despite the company’s additional assurances, and decided to establish an ad hoc commission to evaluate all circumstances. However, according to the General Agreement governing the procurement, only the State Digital Development Agency (VDDA) had the authority to form such a commission. Despite this, Capital requested the opportunity to participate in the ad hoc review session and present its arguments.

The IZM held the ad hoc review session and sent Capital a decision not only rejecting the company’s claims but also suspending Capital’s participation in one section of the EIS catalog for two months, effectively barring the company from participating in that specific procurement for a critical period. IZM officials and bureaucrats held the session before explaining why the company could not participate. The letter was signed by Inita Juhņēviča – the acting State Secretary of the IZM and Head of the State Education Quality Service.

Capital stated that it had never encountered such practice and considered it an exceptional case, as no violations had occurred. The IZM confirmed that the right to suspend a company’s participation in procurements for any length of time, as stipulated in the general agreement, had only been used once in 2024 and was a unique event in the ministry’s history.

The ministry explained that “Capital had placed several computer models in the EIS joint catalog, including a newer model that met all the requirements of the procurement in that category. However, the previously submitted procurement basket contained a computer model that did not meet the technical specifications, which led to the termination of this procurement.” The ministry stated that Capital did not clarify the technical information of the submitted computer equipment but submitted equipment with different technical parameters. However, this does not align with the minutes of the ad hoc session available to Inc.

In response to a question about how the specific penalty was chosen, the ministry’s public relations department stated that it was selected to prevent recurrence and avoid the repeated offering of non-compliant models. “This restriction was imposed to facilitate the procurement process, thereby ensuring the achievement of the project’s objectives and the absorption of EU funds within the deadlines set by external regulations.” The IZM declined to comment on whether its officials considered their actions economically sound and prudent.

Meanwhile, while Capital was barred from participating, the IZM created a new procurement basket, which was won by BIT and the association “Tcon and Lielvārds.” Notably, the new basket was created on January 20 – just one week after the ban on Capital’s participation ended. Was this a coincidence?

Had the ministry waited just one week with the new basket, it could have purchased approximately 19,000 more computers for the allocated 20 million euros (roughly calculated by dividing the total amount by the average computer price). However, it appears the IZM deliberately avoided such a scenario.

The IZM’s apparent decision to block the lowest bidder is not merely an appearance. The General Agreement document, available in the EIS system, states that the customer has the right to unilaterally suspend the agreement for a period in part regarding the right of a supplier or its authorized user to participate in e-procurement processes if the supplier/buyer or its authorized user materially (or repeatedly) violates the technical specifications, general terms, specific requirements, or rules for using the EIS system.

Inc. reviewed most of the general agreement form contracts for 2024 and the period up to the end of August 2025. In none of the general agreement contracts, except those managed by the VDAA through the EIS system, is the exclusion of entrepreneurs from future procurements provided for, thus significantly limiting competition. All contracts provide for penalties and fines in cases where the supplier repeatedly fails to meet delivery deadlines or repeatedly violates something else, and in all cases, the customer is also required to write a claim or warning.

The IZM also used the general agreement procedure to procure other goods and services, reserving the right to withdraw from the agreement only in rare cases, and the right to temporarily restrict competition is not provided for at all.

What did the IZM ultimately purchase?

The summary shows that, for example, instead of the previously desired 3,495 Capital Gauja (Latvian-made) computers with a Windows operating system without a touchscreen and a wireless optical mouse, the IZM purchased twice as many identical specification HP computers, also without a touchscreen, but with a mouse cable at least 1.5m long. The price of one Capital Gauja computer with a wireless optical mouse was 399.12 euros, while the HP computer with a mouse and cable was 483 euros. This means that each mouse cord cost the IZM 84 euros, and multiplying by the number of computers, the ministry spent 640 thousand euros without VAT on computer mouse cords alone.

The IZM purchased 20,294 computers from BIT at 485 euros/piece, while Capital had offered identical computers for 399 euros/piece a few months earlier – this is the disputed position described above. The dispute over these computers cost an additional 1.75 million euros. The initially intended cheapest computers at 262 euros were not purchased at all.

the purchased computers became 40% more expensive by excluding the lowest bidder, with the final price per computer reaching 414.82 euros excluding VAT or 500 euros including VAT, which is essentially the retail price of computers.

Does BIT enjoy special favor from the IZM? For several years, IZM procurements have accounted for a significant portion of BIT’s turnover. In 2022, BIT supplied the ministry with 25,000 computers for 8.6 million euros, and this procurement amount accounted for 60% of BIT’s turnover that year. In 2023, it supplied 23.5 thousand computers to the IZM for 6.8 million euros, which accounted for 43% of BIT’s turnover. In 2025, BIT supplied 24,000 computers to the ministry for 11.1 million euros.